The document discusses issues related to water services funding and management in Ireland. It provides information on: 1) The establishment of a Water Commission to assess funding options and make recommendations taking into account infrastructure needs, borrowing proposals, conservation, standards, and stakeholder input. 2) Opinions that the current Irish system of funding water through progressive taxation is equitable, and that general taxation is the best method to fund infrastructure investment. 3) Concerns that water metering would cost over €1 billion but not reduce usage, and that related costs could more than double annual spending on water services.

1. Right2Water
WEXFORD – 23-11-
2016
Water Commission
Referendum
Next Steps?

2. Water Commission: TOR
 To assess and make recommendation upon the funding of domestic public
water services in Ireland and improvements in water quality, taking into account:
 The maintenance and investment needs of the public water and waste water system
on a short, medium and long-term basis;
 Proposals on how the national utility in State ownership would be
able to borrow to invest in water infrastructure;
 The need to encourage water conservation, including through reviewing information
campaigns on water conservation in other countries;
 Ireland’s domestic and international environmental standards and obligations;
 The role of the Regulator; and
 Submissions from all interested parties.
 The Commission will be empowered to commission relevant research and hear
evidence to assist this work. The Commission shall endeavour to complete its
work within five months of its establishment

3. Best funding system?
 "The Irish system of paying for water and sanitation
services through progressive taxation and non-
domestic user fees, is an exemplary model of fair
equitable and sustainable service delivery for the
entire world”.
 Maude Barlow
 Author of Blue Gold, Blue Planet, Blue Future, Blue Covenant…
 Senior Advisor on Water to the 63rd President of the United Nations
General Assembly
 Recipient of 12 honorary doctorates
 Lifetime Achievement 2008 Canadian Environment Awards,
 2009 Earth Day Canada Outstanding Environmental Achievement
Award
 The 2009 Planet in Focus Eco Hero Award
 2011 EarthCare Award, the highest international honour of the Sierra
Club (U.S.).

4. European Water Movement
"It is clear that the best method of securing
access to water, and securing funds for
infrastructural investment, is through
general taxation.”
 The European Water Movement is an open, inclusive and pluralistic
network whose goal is to reinforce the recognition of water as a
commons and as a fundamental universal right. We are united to fight
against privatisation and commodification of this vital good, and to
construct a public and communal management of water, founded on
the democratic participation of citizens and of workers.

5. Maintenance & Investment needs?

6. Can’t afford to build houses?
Hospitality Sector VAT rate €620m
Budget 2015
• Income Tax Change (41% - 40%) €405m
• USC Changes €237m
Budget 2016
• USC Threshold Change & Cut €772m
• Earned Income Credit Changes €61m
• Knowledge Development Box €50m
• Motor Tax Cuts €43m
• Capital Acquisitions Tax €33m
• Capital Gains Tax (Entrepreneur Relief) €27m
• Employers PRSI Threshold Changes €7m
Budget 2017
• USC Thresholds and Cut €390m
• Earned Income Tax Credit €58m
• Capital Acquisition Tax Thresholds €22m
• DIRT reduction €9m
TOTAL:

7. Environmentally Unsound
“International research shows that installing domestic
water meters is unlikely to make any real difference to the
amount of water used by families. For example in the UK,
Germany, and the Netherlands it has been found that
metering each home makes little difference to the amount
of water used by families.
SIPTU, 2011

8. No Water Meters
Metered Water
Charges
• The UK average is 68,405 litres per person
• Irish Water - 54,750 litres per person
Conservation?

9. Why the meters?
 Senior Executive Engineer for Water, Gerry Concannon, estimated
that the cost of unmetered water is currently about €350.00 p.a. per
domestic unit. When all of the costs of metering involving
installation, maintenance, administration and replacement are
considered he pointed out that this cost almost doubles. (SIPTU -
2011)
 “The proposed expenditure on water metering would mean
spending more than €1 billion which we don’t have on
something we don’t need!” Engineers Ireland, 2011

10. Economically inefficient
 Bringing in water charges means you increase costs through:
 Advertising expenditure (€3m)
 Consultants (€90m)
 Call centers
 Billing cycle (€6m)
 IBEC fees (min €100k)
 Metering (€500m)
 Debt collection agencies
 Borrowing repayments – interest, etc.
 €600m per year approx – Before you fix a leak or purify one drop of
water.
 That’s more than double the spend on water and sewage in 2013.
Right2Water believes that money would be better spent fixing leaks,
upgrading infrastructure and incentivising water saving devices.

12. Allowances v agenda?
 Fiscal Compact encourages off-balance sheet – debt/GDP ratio
 Starts with the revenue raising figure – domestic water charges to raise
€271m
 UN resolution – 36,500 litres per person (human right to water).
 If everybody reduces usage to 36,500 litres – still have to raise €271m –
Unit Price Increase
 Every litre above allowance would be charged at extortionate rate –
unemployed, underemployed, pensioners, disabled, etc.
 Income allowances would be eroded over time – eg. bin charges
 Allowances are also a cost - €213m for fuel allowance per annum
 Pay for what you use?
 “Polluter pays”? – commercial water charges 90% v 10%

13. Polluter pays?
 BRITVIC: Pre-tax profits
climbed 10.6pc to £147m
 The operating profit margin
rose 100 basis points to
13.2pc, prompting Britvic to
raise its full-year dividend
10pc to 23p.

“Earlier this year Britvic bought Brazilian soft drink maker Ebba for £114m,
giving it access to the sixth-largest soft drinks market in the world, and the
second largest “concentrates” market. Mr Litherland acknowledged
economic conditions in Brazil were “challenging”, but said the Ebba
acquisition would deliver “sustainable growth in the coming years”

14. Socially Destructive
 The original water pricing before the Right2Water demos and
government concessions meant a retail worker would have spent
approx 3% of their income on water at the schemes inception – which
is the internationally recognised water poverty rate.
 The price of water in five US cities – Austin, Charlotte, Chicago, San
Francisco and Tucson ballooned by more than 50% over the last five
years.
 In the UK, water costs have gone up by more than 313% since
privatisation 25 years ago – almost double the Retail Price Index (RPI)
rate.
 In the city of Detroit in the United States 70,000 families have had their
water shut off in recent years for being unable to pay bills.
 This has also occurred in Rome, parts of France and Eastern Europe,
and the phenomenon is growing.

15. Privatisation
 ‘Privatisation Of Irish Water Is Ultimately Envisaged’, Eurostat
 Water as an asset class will, in my view, become eventually the
single most important physical-commodity based asset class,
dwarfing oil, copper, agriculture commodities and precious metals.’
Citigroup Chief Economist Willem Buiter
 Water is now 3 times as profitable as oil or gas

19. The Water Charges Model
 In 2013 in Britain, private water companies made profits of:
€2.81bn and paid €2.55bn to shareholders while paying only €101m in
taxes.
 Seven water companies paid no corporation tax at all and a report
has shown that the industry is failing to help customers with “sky-
high bills”.
 The largest, Thames Water, made more than £1.8billion between
2008 and 2013 and paid more than £1.4billion to its shareholders.
 It paid just £2.3million in corporation tax in that period, an
effective tax rate of 0.128%.
 They also paid no corporation tax in 2013 while making £145m in
profit, and paying out £231m in dividends to shareholders.

20. Borrowings?
 ‘The huge levels of debt used by the industry to finance its
operations are costing UK consumers £2bn a year more than if it
was publicly financed – equating to nearly £80 per household.
 The figure comes from the difference the Government pays to
borrow money and the rates that the water companies secure on
the international money markets. In total, the companies have
amassed debt of £49bn and paid more than £3bn in interest
payments on it in 2012, as well as £884m in dividends. Total
revenue in 2012 came in at £10bn.
 This suggests that almost a third of the money spent by people
on water bills in England and Wales went to paying either
interest charges on water company debt or dividends to their
owners, most of which are now based overseas.

22. Expert Water Panel
 “An Expert Commission will be set up to assess and make
recommendation upon the funding of domestic public water services in
Ireland and improvements in water quality, taking into account:
 The maintenance and investment needs of the public water and waste water
system on a short, medium and long-term basis;
 Proposals on how the national utility in State ownership would be able
to borrow to invest in water infrastructure;
 The need to encourage water conservation, including through reviewing
information campaigns on water conservation in other countries;
 Ireland’s domestic and international environmental standards and
obligations;
 The role of the Regulator; and
 Submissions from all interested parties.

23. Interest
Profits
Metering process
Spending on water and
infrastructure

24. What method would you choose?
0
20
40
60
80
100
120
Domestic Water Charges General Taxation
Spending on water and
infrastructure
Metering process
Profits
Interest
21
%
13
%
33
%
33
%
100%

26. Referendum

27. Referendum
 Article 28 Section 4:2.1
 ‘The Government shall be collectively
responsible for the protection,
management and maintenance of the
public water system. The Government
shall ensure in the public interest that
this resource remains in public
ownership and management.’
 FF & FG want amendments!

28. October 11th

29. December 10th

30. March 21st

31. August 29th

32. February 20th

33. Right2Water
THANK YOU